First, thanks for the wonderful software. I've been using it for a very long time.

Under Tag Panel's default values, we are presented with a scroll-down list of 3 choices: , , and .

Very often I name the file folders on my PC according to the album names. I suspect many people do the same. I wonder if you could add an additional choice of to the list, so that the folder name is used as one of the selectable values for the album tag.

After implementation, the scroll list would look something like:

For instance, if I have a list of mp3s inside this folder on my pc: c:\music\donald duck songs
I could simply use as the tag for 'album', and 'donald duck songs' would be used as tag for the mp3s' album.

Thanks! I didn't know that the filename-to-tag converter could be used to capture the folder name as well.
Wow, this opens a whole new world. I could load many folders, or subfolders, and easily convert them all at once!

and I want the album tag to be like 'Avril Lavigne - The Best Damn Thing'

what should be the syntax then?

As the converter could not import a variable (like %album%) and a literal at the same time (which ist the hyphen in your example) you are stuck with a "format tag field" action.
If you can do without the hyphen, though, then the syntax would be:
%album%\%album%

But you should import artist and album separately with the mask
%artist%\%album%
and then format the tag field album:
Format tag field ALBUM
Format String: %artist% - %album%